Berenberg in $1.1 Billion Shipping Push With New Debt Fund

By Nicholas Brautlecht

(Bloomberg) — Joh. Berenberg Gossler & Co. KG will enhance lending to the maritime trade by as a lot as 1 billion euros ($1.1 billion) by means of a brand new transport fund for institutional buyers looking for a substitute for document low bond yields.

The world’s second-oldest financial institution plans to attract insurers, pension funds and saving banks into transport, selling the debt fund as a counter-cyclical funding, mentioned Andreas Schultheis, head of worldwide transport at Berenberg. The container trade is battling years of overcapacity and commodity transport charges are close to document lows.

“We plan to massively expand our shipping business, but with third-party money,” Schultheis mentioned in an interview in Hamburg. “The first step will be a 100 million-euro portfolio in the first half of this year and we believe it may grow to 1 billion euros in the coming years.”

German maritime lenders together with Hamburg-based HSH Nordbank AG, which holds 21 billion euros in transport loans, are predominantly invested in container transport. That market is battling a seventh yr of overcapacity after a increase in ship deliveries coincided with the monetary disaster. Saddled with billions of euros in unhealthy debt, lenders together with Commerzbank AG and Norddeutsche Landesbank curbed or halted lending to the trade, leaving room for brand new rivals to broaden.

The yield for buyers will probably be a number of instances greater than the curiosity on company lined bonds such because the HSH Nordbank transport paper issued this month, which carried an annual coupon price of 0.5 %, mentioned Schultheis, who’s presenting the brand new fund to buyers on the Marine Money convention in Hamburg on Thursday. It will probably be domiciled in Luxembourg, he mentioned.

Berenberg, which is managing belongings totaling 30 billion euros, has centered on short-term lending for transport and aiding the larger carriers resembling Hapag-Lloyd AG with bond points.

The fund will include newly issued loans backed by vessels of varied sizes and kinds, mentioned Schultheis. “The worst case scenario is that a loan turns sour and then I need a vessel from a liquid market segment like a standard container or bulker vessel,” he mentioned.